Repair Expenses, Selling Contracts and

Size: px
Start display at page:

Download "Repair Expenses, Selling Contracts and"

Transcription

1 Repair Expenses, Selling Contracts and House Prices Authors John R. Knight, Thomas Miceli and C. F. Sirmans Abstract This article examines the impact of repair expenses on the selling price of a house. Using data that include the actual dollar amount of repairs stipulated in the settlement statement, we investigate the frequency and extent to which the performance of major repairs is part of the sales contract. We find that most homes are restored to a normally maintained state each time the home changes hands, and that the cost of bringing the home to this condition is included as part of the house selling price. This implies that it may be unnecessary to measure maintenance levels when using transaction data to study components of house price or to construct house price indexes. Introduction Homeowners and landlords regularly perform maintenance and make minor repairs to their properties in order to enjoy a normal level of housing services. Major repairs, however, are often deferred until their need is obvious or until the property is sold or prepared for sale. Existing homeowners logically put off repairs as long as possible, but prospective buyers are aware of impending major repairs and require that either the seller complete repairs prior to closing, discount the price to allow the buyer to make needed repairs or provide the buyer with a repair allowance as part of the settlement agreement. Roof repair or replacement, carpet replacement, exterior painting, and heating, ventilation and air conditioning replacement are major upkeep requirements that fall into this category. Lack of data has been the major obstacle to studying the relationship between homeowner maintenance activities and house price. As Reschovsky (1992) notes: The factors influencing household decisions regarding home upkeep and improvement remain one of the least studied aspects of housing economics. This relative lack of attention most likely reflects the scarcity of good data rather than the lack of importance. The level of maintenance, because it is unobserved in most data, usually goes unmeasured in hedonic house price regressions. This raises concerns about bias JRER Vol. 20 No

2 324 Knight, Miceli and Sirmans in the estimates of other components of house prices as well as concerns about bias in house price indexes constructed using transaction data. The data we use in this study are very rich in information relating repair expenditures to the associated home sales. In this article, we look at the detail of house sales contracts. We have the dollar amount of repairs and maintenance associated with under-maintained homes. This sheds light not only on the frequency and cost of major repairs at point-of-sale, but also on the nature of the transaction itself. We find evidence that a home s transaction price represents the value of a normally maintained home even when the home has been substantially under-maintained prior to being marketed. As a result, concern over omitting extraordinary maintenance as a variable in transaction-based hedonic equations appears misplaced. The article is organized as follows. In the next section, we briefly review the theoretical and empirical literature surrounding property maintenance. Also germane are studies of the capitalization of contract concessions and contingencies into house selling price. The following section develops the theory describing buyer and seller behavior with respect to under-maintained houses. Next, we describe typical behavior of sellers and buyers with respect to repairs and maintenance. The following sections describe the data and statistical model used and the results. The final section is the conclusion. Literature Review Hedonic theory (Rosen, 1974) provides a framework for studying the contribution of individual product characteristics to the value of differentiated products such as houses. Marginal values of almost every conceivable amenity and disamenity, ranging from physical characteristics such as living area and quality of construction to locational attributes such as proximity to public transportation, have been the subjects of previous research. Hedonic regressions have also been used to estimate depreciation rates and the impact of noise and air pollution on house value. Relatively few empirical studies to date have focused on the details of the sales contract itself, despite the direct impact of contractual agreements on the selling price of a house. Allen, Shilling and Sirmans (1987), the first to employ the hedonic framework to investigate the effect of differences in sales contracts on house prices, found that the price premium exacted by the market for contract contingencies is dependent on the number of contingencies and the manner of their bundling within the contract. Similarly, Shilling, Sirmans, Turnbull and Benjamin (1992) found that contingent contracts result in lower sales prices when property and market characteristics are held constant. Seller concessions related to financing costs and major repairs, proxied by a dummy variable for the existence of such provisions, were found to have an insignificant impact on selling price.

3 Repair Expenses and House Prices 325 Financing concessions have been the subject of most of the literature relating the details of the sales contract to house selling price. Of particular interest in these studies is the degree to which creative financing and seller financing concessions are capitalized into the transaction price. Brueckner (1984) provides the theoretical foundation for this area of study. Generally, empirical investigation of this issue (Sirmans, Smith and Sirmans, 1983; Smith, Sirmans and Sirmans, 1984; and Ferreira and Sirmans, 1986) has revealed that seller concessions are partially, but not fully, capitalized into the transaction price. This implies that buyers and sellers share the benefit and cost of such an arrangement. Ferreira and Sirmans (1989) extend this inquiry by looking not only at the impact on selling price, but also at the effect on selling period. They discover that, in certain markets, the financing concessions may manifest their benefits in terms of a reduced time-on-market rather than in a higher selling price. While the value of maintenance and repairs has been the subject of a number of theoretical (e.g., Dildine and Massey, 1974; Sweeney, 1974; and Arnott, Davidson and Pines, 1983) and empirical (e.g., Chinloy, 1980; Malpezzi, Ozanne and Thibodeau, 1987; and Knight and Sirmans, 1996) housing studies, we know of only one (Shilling, Sirmans, Turnbull and Benjamin, 1992) that looks at the provision for maintenance and repair costs within the sales contract. In this latter study, major repairs are combined with financing concessions as a single dummy variable in a hedonic regression that controls for other property characteristics. In contrast, we have data that include the dollar amount of major repairs stipulated in the settlement statement and are therefore able to isolate these concessions from others that may appear in the contract for sale. An understandable preconception may be that repair allowances, much like financing concessions, would be capitalized, at least partially, into the transaction price of a house. We elaborate the ways that a buyer wishing to acquire a normally maintained home might approach a purchase. We also develop a theory that relates the unobserved willingness to pay and the cost of needed repairs to the observable selling price and repair allowances. Theory We assume that buyers wish to purchase a normally maintained home. Four possible situations cover the range of methods by which the buyer might acquire such a home: Case 1: The buyer might purchase a home that has received a normal level of maintenance and repairs over the holding period of the current owner. In this case, no special arrangements are included in the sales contract, and the transaction price represents the value of the home. Case 2: The buyer might require the seller to make the repairs necessary to bring the house to a normal level of maintenance as part of the purchase agreement. The selling price represents the value of a JRER Vol. 20 No

4 326 Knight, Miceli and Sirmans normally maintained home, the repairs are accomplished before closing and repair expenditures appear in the closing statement as a reduction in the proceeds available to the seller at closing. Case 3: The buyer might receive a repair allowance as part of the closing settlement. Once again, the selling price represents the value of a normally maintained home. Although the house is undermaintained at closing, it is presumed that the buyer makes the needed repairs soon thereafter. Case 4: The buyer might purchase, without contingencies or allowances, a home that does not fall into the category of a normally maintained home. In this case, the selling price represents the value of a normally maintained home plus or minus the difference in value associated with the home s repair level. To formalize these cases, let W N be the amount that a household is willing to pay for a normally maintained house, and let R 0 be the cost of repairs needed to bring the house up to the normal level. Assume that a fraction (0 1) of this amount is to be paid by the buyer, while the seller pays the remaining fraction, 1. The household s net willingness to pay for the house is therefore: W R. (1) N Note that neither W N nor R is generally observable. Instead, we observe the quoted price of the house, P, and either the repair expense of the seller or the repair allowance to the buyer at closing (if any), A. The household s net payment for the house is therefore P A. In equilibrium, it must be true that: P A W R. (2) N Equation (2) should hold for all houses if the hypothesis that the housing market correctly capitalizes repair expenses is true. Consider how this equation relates to the above cases. In Case 1, a normally maintained house is sold, so R A 0. That is, no repairs are needed and no repair allowance is given at closing. It follows from (2) that the sale price should equal the value of a normally maintained house, or P W N. In Case 2, the house has not received normal maintenance, but the seller agrees to make all necessary repairs prior to closing. Thus, R 0, but A 0, implying that P W N. That is, the sale price should also equal the value of a normally maintained house regardless of the value of R. In Case 3, the house has again received sub-normal maintenance, but here the buyer agrees to pay a share of the required repairs. That is, R, A and are all

5 Repair Expenses and House Prices 327 positive. Suppose that the repair allowance at closing exactly equals the buyer s share of repairs, or A R. Then (2) implies that in equilibrium the price should be P W N ; the price again equals the value of a normally maintained house. Alternatively, suppose that A R, or the repair allowance is less than the buyer s share of repairs. In the extreme, suppose that the buyer receives no allowance for maintenance (A 0) and plans to finance all repairs himself. This is the scenario in Case 4. Equation (2) implies that in equilibrium, P W N R, or the sale price should equal the value of a normally maintained house discounted by the buyer s expected maintenance costs. The preceding analysis implies that in all but Case 4, the sale price should equal the value of a normally maintained house; that is, it should be independent of any repair expenses needed to bring the house up to a normal level of maintenance. Only in Case 4 do we predict that the price will be negatively related to the required repairs. Unfortunately, we can not separate Case 4 homes from Case 1 homes. Therefore, the extent to which our theory holds empirically depends on the prevalence of Case 4 homes for the sample in question. Before turning to the empirical analysis, it is interesting to speculate on why at least some buyers and sellers transact at a gross sale price that includes repairs rather than just a net price equal to W N R (Case 4). One possibility has to do with the financing of the repairs. Note that by obtaining a mortgage for W N rather than W N R, the buyer is in effect financing the required repairs via the mortgage, which may be the cheapest source of funds given the lower interest rate on mortgages compared to personal loans and the tax deductibility of mortgage interest. At the same time, the lender is willing to finance repairs because it brings the house up to the normal level of repair, at which time it is worth W N. Repairs and Maintenance Homeowners differ in the extent they engage in repairs and maintenance during their period of ownership. Some of this relates to behavioral differences, such as the tolerance levels for house imperfections, or even differences in perception of what constitutes an imperfection. Some differences in repair and maintenance levels may be caused by income constraints that prevent an owner s maintaining the home in the desired condition. Thus, for whatever reason, some homes are maintained continuously in a like new condition, while some houses proceed during the course of ownership to a needs work state. Most home buyers are quite fussy about the condition of the house they buy. They typically insist that all plumbing and electrical equipment work properly and they are concerned as well about faded or chipping paint and worn or damaged carpet. Many buyers go to the expense of hiring an inspector to check the condition of house components and to diagnose structural problems that may not be apparent to the layman. Regardless of differences in homeowner behavior with respect to repairs and maintenance during tenancy, the attitudes and actions of home buyers toward the JRER Vol. 20 No

6 328 Knight, Miceli and Sirmans condition of the house at point of purchase bring most homes to a normal level of maintenance by the time the transaction reaches close of escrow. This result may be reached by the continuous attention of homeowners, or it may occur by stipulation of the buyer as a condition of sale. Data and Model To investigate the effect of maintenance level on the quoted selling price of homes, we examined the details of all the closed sales of Coldwell Banker Grupe, a large brokerage firm in Stockton, California. This firm participates, as either listing or selling broker, in about 20% of all residential transactions in the area. In all, 342 sales contracts were examined, with particular focus on the dollar amount of repairs stipulated in the settlement statement. Stockton is a medium sized city in the San Joaquin Valley located about forty miles south of Sacramento and about eighty miles east of San Francisco. We filtered the data to reduce the impact of outliers, eliminating those properties that sold for less than $50,000 or more than $325,000, properties with less than 700 or more than 5,000 square feet of living area, and properties on less than one-tenth acre or more than five acres of land. The remaining data set consists of 264 transactions occurring between July, 1997 and December, 1998, a period during which home prices were generally rising. Summary statistics for the data appear in Exhibit 1. The average home had about 1,725 square feet of living area with three bedrooms, was about twenty-three years old and sat on a quarter-acre lot. The average home sold for about $138,000. The dollar amount of the repairs enumerated in the settlement statement ranged from zero to $25,000, and on average constituted about 1% of the selling price, or about $1,380. Further evidence of the importance of repairs in negotiations between buyers and sellers is provided by Exhibit 2, which shows the frequency distribution of repairs by dollar amount. Fully 75% of the contracts provided for the performance of repairs. Over half of the homes in the sample had repairs of at least $500, and about 38% of the transactions included amounts of over $1,000. The preponderance of contracts involving such repairs implies that a large percentage of home sales fall into the category of either Case 2 or Case 3, situations wherein the homes are restored to a normal level of maintenance at the time of sale. Only 25% of the home sales involved no repairs; these transactions would meet the criteria of Case 1, in which no repairs are needed, or Case 4, where premiums (discounts) apply for over- or under-maintained homes. 1 We employ hedonic pricing theory (Rosen, 1974) to construct the statistical model. The theory holds that the composite price of a multi-attribute product is simply the sum of the marginal prices of the individual attributes. Attribute prices can be obtained statistically by regressing the sales price of homes on the characteristics of the homes thought to influence price. Hedonic pricing has been widely used in

7 Repair Expenses and House Prices 329 Exhibit 1 Summary Characteristics of Data Variable Description Mean Std. Dev. Min. Max. Percentage of Sample Observations SPRICE Selling price 137,996 57,726 56, ,000 LIVAREA Square feet of living area (100 s) BEDS Number of bedrooms TREND Market trend variable for time of sale ACRES Lot size in acres AGE Age of dwelling in years MR Dollar amount of repairs in closing statement 1,379 2, ,000 PMR Repair expense as a percentage of selling price MRDY Repair expense part of closing statement SCD2 House in school district SCD3 House in school district SCD4 House in school district JRER Vol. 20 No

8 330 Knight, Miceli and Sirmans Exhibit 2 Frequency Distribution of Repairs % % Frequency % 60.00% % % 0 None > % $ Amount of Repairs Frequency Cumulative % the house price and house price index literature to measure the effect of various characteristics on house price and to measure the change in house prices over time. The statistical model is: y x, (3) where y is a vector of selling prices for the homes in the sample, x a matrix of the physical characteristics explaining the selling price, a vector of coefficients representing the marginal contribution of each characteristic on composite house price and a homoskedastic error term with mean zero. The matrix of explanatory variables in our study includes the number of square feet of living area, the number of bedrooms, the size of the lot on which the house sits, and the age of the home at the time of sale. We also include a trend variable to control for the fact that market prices were rising during the study period, 2 and a dummy variable for the school district associated with the home. In addition to valuing the educational differences among the school districts, this latter dummy variable proxies for many of the unmeasurable but value-laden amenities

9 Repair Expenses and House Prices 331 associated with a home s location. We augment this basic hedonic model with information regarding the repair expenditures included as part of the sales agreement. The augmented model: y x z, (4) includes a vector z of house repairs, with the coefficient measuring the contribution of repairs to the selling price of the home. We operationalize the repair characteristic in two ways: first, as a dollar amount of repairs itemized in the closing statement; and second, as a dummy variable, one if any repairs were stipulated in the selling agreement and zero otherwise. In accordance with our theory, we hypothesize that the coefficient,, will be statistically insignificant. This hypothesis of insignificance differs from the positive and significant coefficient encountered in the literature surrounding the capitalization of financing concessions into selling price. The difference is in the ability to distinguish between subsets of comparison. Homes with financing concessions are clearly distinct from those without, and the cash equivalence of concessions imparts value only to the homes with concessions. In our case, except for Case 4 homes, the values of homes with point-of-sale repairs are no different from the values of homes that have been maintained and repaired throughout the duration of the seller s occupancy. Homes with time-ofsale repairs sell for no more or less than homes without, because the repairs merely bring the value of the house to the norm at one discrete point rather than continuously over time. The possibility of Case 4 homes in the sample causes us to modify our hypothesis somewhat. Insignificance of the repair coefficient is consistent with three possible situations. First, all transactions are categorized as Case 1, 2 or 3. That is, all homes are normally maintained, either over time or by repairs performed at pointof-sale. Second, there are Case 4 homes in the sample, but the degree of overand under-maintenance is mild. Finally, there are Case 4 homes, and some may be substantially over- or under-maintained, but the extreme outcomes offset the effects of each other. In a practical sense, it matters little which of the above situations produces an unimportant repair variable. The fact that, on average, homes are at a normal level of maintenance and repairs when sold would be sufficient to allay concerns about omitting the variable when using transaction-based data. Results Exhibit 3 provides the model estimation results. We report the results of the semilog model, ln(y) X, the most common specification for hedonic regressions of JRER Vol. 20 No

10 332 Knight, Miceli and Sirmans Exhibit 3 Parameter Estimates for Hedonic Models of House Value Model 1 Model 2 Model 3 Variable Estimate Std. Error Estimate Std. Error Estimate Std. Error Constant Sq. ft. of living area (100 s) Number of bedrooms School district School district School district Time trend (monthly) Acreage Age Dollar repairs Repairs dummy Adj. R Notes: All models take the functional form ln(y) X. Model 1 contains no information regarding the performance of maintenance and repairs as part of the sales agreement. Model 2 adds the dollar amount of repairs contained in the sales contract. Model 3 is a repair dummy that is one if repairs exceeded $500 and zero otherwise. t-statistics appear beneath the standard errors. house price on house characteristics. Analysis was also performed using linear and log-log functional forms. The results of those analyses are nearly identical to those reported here. Model 1 estimates house attribute values without any information regarding repairs. This relatively parsimonious model explains 76% of the variation in the selling price of homes in the sample. All coefficients are significant at the 1% level, and all are of the expected sign. 3

11 Repair Expenses and House Prices 333 Model 2 imposes additional information regarding the dollar amount of any repairs listed in the settlement statement. As hypothesized, the coefficient on this variable is insignificant. Note also that adding this variable has negligible impact on the house characteristic parameter estimates. The model in fact has a lower adjusted R 2 and a lower F-value than the model that excludes repair information. In Model 3, we represent repair information as a binary variable, distinguishing transactions that involved repairs of any magnitude from those that had no repairs. Comparing Model 1 with Model 3 in Exhibit 3, we see once again that repair information is insignificant in explaining variation in transaction price. Parameter estimates of house characteristics are virtually unaffected, and again model performance as measured by adjusted R 2 and the F-Statistic is degraded. Support for our proposition that the transaction price represents the value of a normally maintained home is provided by the insignificance of the maintenance and repair estimates in Models 2 and 3 as presented in Exhibit 3. One possible source of insignificance is the high variance of parameter estimates associated with multicollinearity, a data problem known to exist in hedonic models. For this reason, we subjected the data to a barrage of tests for ill-conditioned data. We examined simple correlations, variance inflation factors, auxiliary regressions, condition numbers of the normalized data and a collinearity diagnostic table showing the proportion of variance for each explanatory variable associated with each characteristic root of the data. As summarized in Exhibit 4, none of these Exhibit 4 Data Collinearity Diagnostics Model 2 Model 3 Collinearity Test Dollar Amount of Repairs Dummy Variable for Repairs Simple correlations Highest correlation was 0.28 with the age variable. Variance inflation factor a Auxiliary R 2b Highest condition number c Variance proportions No two variables had a high proportion of variance associated with the same characteristic root. Highest correlation was 0.16 with the age variable. No two variables had a high proportion of variance associated with the same characteristic root. a A variance inflation factor of 10 or higher would indicate a collinearity problem. b R 2 from regressing the maintenance and repair variable on the other explanatory variables in the model. A high R 2 would reveal a problem. c Pertains to normalized data. A condition number greater than 30 denotes ill-conditioned data. JRER Vol. 20 No

12 334 Knight, Miceli and Sirmans tests reveals a collinearity problem associated with the maintenance and repair variables. Conclusion This article contains important information about the performance of repairs at point-of-sale. We find evidence in our sample that about three-fourths of residential transactions provide for repairs within the contract, and that many of these repairs entail significant dollar amounts. According to local residential brokers, requiring that the repairs be accomplished prior to closing (Case 2) is the usual manner by which the buyer acquires the desired normally maintained home; the occurrence of repair allowances to the buyer (Case 3) is less frequent. From this, in a large majority of transactions, we are able to infer the buyer s willingness to pay for such normally maintained home, a value that is not directly observable in the data. The 25% of transactions that did not involve repairs would be split in unknown proportions among homes that needed no repairs (Case 1), and homes that were over- or under-maintained and were sold as such (Case 4). Only in the latter case would the selling price represent other than the value of a normally maintained home. Moreover, if the number of over- and under-maintained homes were roughly equal in a sample, as seems reasonable, the effects of these observations would be likely to statistically counterbalance each other. As hypothesized, the variables used to represent the existence and level of repairs called for in the contract were insignificant. This gives further support to the notion that the selling price measured in transaction-based data is representative of the value of a normally maintained home. We further note that the hedonic model we choose is relatively parsimonious in the number of explanatory variables, allowing ample opportunity for the repair variables to explain variation in selling prices if they were capable of doing so. Collinearity diagnostics are fully supportive of this assertion. The major implication of our study is that maintenance, repair and upkeep data, notoriously difficult to measure in transaction-based data, may be unnecessary in hedonic price regressions. Inasmuch as the measured selling price represents the value of a normally maintained home in the vast majority of cases, unbiased estimates of the value of house characteristics, and accurate estimation of hedonic house price indexes may be accomplished without such information. Of course, our conclusions pertain only to the sample we studied, and in general would depend on the preponderance of Case 4 homes in any given sample. Replication of our results in other data scenarios would be needed to generalize the conclusions. Endnotes 1 Unobserved in our study is the bargaining process between buyer and seller. Some sellers may resist the concessions required by prospective buyers and wait for a less demanding

13 Repair Expenses and House Prices 335 buyer. This creates sample selection bias if the population of interest is both sold and unsold homes. Our focus is on the homes that culminate in a transaction, and our results pertain only to this censored sample. 2 The trend variable summarizes the price effect of the various components of the real economy during the study period. The practice is common in house price and house price index literature. A trend variable was chosen over periodic dummy variables because the time effect was steadily upward during the study period as indicated by a house price index for the Stockton area using dummy variables and a much larger data set. 3 The bedroom coefficient is negative because it represents the marginal value of an additional bedroom while holding square feet of living area constant. The result is common in hedonic regressions of price on house characteristics. References Allen, P. R., J. D. Shilling and C. F. Sirmans, Contracting, Contingencies and Single-Family House Prices, Economic Inquiry, 1987, 25, Arnott, R., R. Davidson and D. Pines, Housing Quality, Maintenance and Rehabilitation, Review of Economic Studies, 1983, 50, Brueckner, J. K., Creative Financing and House Prices: A Theoretical Inquiry into the Capitalization Issue, Journal of the American Real Estate and Urban Economics Association, 1984, 12:4, Chinloy, P., The Effect of Maintenance Expenditures on the Measurement of Depreciation in Housing, Journal of Urban Economics, 1980, 8, Dildine, L. L. and F. A. Massey, A Dynamic Model of Private Incentives to Housing Maintenance, Southern Economic Journal, 1974, 40, Ferreira, E. J. and G. S. Sirmans, Interest Rate Volatility and Assumable Loan Value in Creative Financing, The Real Estate Appraiser and Analyst, 1986, 52, , Selling Price, Financing Premiums, and Days on the Market, Journal of Real Estate Finance and Economics, 1989, 2, Malpezzi, S., L. Ozanne and T. Thibodeau, Microeconomic Estimates of Housing Depreciation, Land Economics, 1987, 6, Knight, J. R. and C. F. Sirmans, Depreciation, Maintenance, and Housing Prices, Journal of Housing Economics, 1996, 5, Reschovsky, J. D., An Empirical Investigation into Homeowner Demand for Home Upkeep and Improvement, Journal of Real Estate Finance and Economics, 1992, 5, Rosen, S., Hedonic Prices and Implicit Markets: Product Differentiation in Pure Competition, Journal of Political Economy, 1974, 82, Shilling, J. D., C. F. Sirmans, G. K. Turnbull and J. D. Benjamin, Hedonic Prices and Contractual Contingencies, Journal of Urban Economics, 1992, 32, Sirmans, G. S., S. D. Smith and C. F. Sirmans, Assumption Financing and Selling Price of Single-Family Homes, Journal of Financial and Quantitative Analysis, 1983, 18, Smith, S. D, G. S. Sirmans and C. F. Sirmans, The Valuation of Creative Financing in Housing, Housing Finance Review, 1984, 3, JRER Vol. 20 No

14 336 Knight, Miceli and Sirmans Sweeney, J. L., Quality, Commodity Hierarchies, and Housing Markets, Econometrica, 1974, 42, The authors thank Larry Vivian and Jerry Abbott of Coldwell Banker Grupe in Stockton, California, and Cindy Scheublein, Liina Veidemann and Zhilan Feng for their assistance in collecting and developing the data for this study. John R. Knight, University of the Pacific, Stockton, CA or Thomas Miceli, University of Connecticut, Storrs, CT or C. F. Sirmans, University of Connecticut, Storrs, CT or

Real Estate Agent Remarks: Help or Hype?

Real Estate Agent Remarks: Help or Hype? Real Estate Agent Remarks: Help or Hype? Authors Jerry T. Haag, Ronald C. Rutherford and Thomas A. Thomson Abstract This article groups the remarks of a multiple listing service listing into common themes

More information

Chapter 38. Appraising Income Property INTRODUCTION

Chapter 38. Appraising Income Property INTRODUCTION Chapter 38 Appraising Income Property INTRODUCTION The income appraisal approach estimates the current market value for a real property by projecting and analyzing the income that the property could generate.

More information

Types of Value LEARNING OBJECTIVES KEY TERMS INTRODUCTION

Types of Value LEARNING OBJECTIVES KEY TERMS INTRODUCTION 3C H A P T E R T H R E E Types of Value LEARNING OBJECTIVES Students will be able to 1. understand that there are objective and subjective views of value and know which applies to real estate valuation.

More information

Pricing, Exposure and Residential Listing Strategies

Pricing, Exposure and Residential Listing Strategies Pricing, Exposure and Residential Listing Strategies Authors John D. Benjamin and Peter T. Chinloy Abstract Sellers of houses signal their motivation or willingness to sell through price and contractual

More information

Journal Of Financial And Strategic Decisions Volume 11 Number 1 Spring 1998

Journal Of Financial And Strategic Decisions Volume 11 Number 1 Spring 1998 Journal Of Financial And Strategic Decisions Volume 11 Number 1 Spring 1998 AN EMPIRICAL STUDY OF THE IMPACT OF FOREIGN OWNERSHIP ON THE VALUES OF U.S. COMMERCIAL PROPERTIES Arnold L. Redman * and N. S.

More information

Agency theory and foreclosure sales of properties

Agency theory and foreclosure sales of properties Agency theory and foreclosure sales of properties K W Chau 1 and R C K Ng Department of Real Estate and Construction, The University of Hong Kong Abstract This study analyzes the effect of foreclosure

More information

[03.03] Guidelines for the User Cost Method to calculate rents for owner occupied housing. International Comparison Program

[03.03] Guidelines for the User Cost Method to calculate rents for owner occupied housing. International Comparison Program International Comparison Program [03.03] Guidelines for the User Cost Method to calculate rents for owner occupied housing Global Office 3 rd Technical Advisory Group Meeting June 10-11, 2010 Paris, France

More information

FHA/VA Financing and Price Discounts

FHA/VA Financing and Price Discounts FHA/VA Financing and Price Discounts Authors Paul K. Asabere and Forrest Huffman Abstract This study examines the effects of FHA and VA mortgage financing on home prices. Using a database of nearly 9,000

More information

The principle of excess land is a fundamental concept in appraisal practice,

The principle of excess land is a fundamental concept in appraisal practice, A Discussion of Excess Land Concepts and Theory by Joseph M. Webster, MAI The principle of excess land is a fundamental concept in appraisal practice, but surprisingly few articles have been devoted to

More information

The Impact of Commissions on Home Sales in Greater Boston

The Impact of Commissions on Home Sales in Greater Boston The Impact of Commissions on Home Sales in Greater Boston By Panle Jia and Parag A. Pathak Buying or selling a residential property is one of the most important financial decisions for a large majority

More information

Step 1 Getting Pre-Qualified

Step 1 Getting Pre-Qualified Step 1 Getting Pre-Qualified Now that you ve made the decision to purchase a home, the next step is to get pre-qualified from a lending institution, like Michigan Mortgage Solutions, to determine how much

More information

Example G Cost of construction of nuclear power plants

Example G Cost of construction of nuclear power plants 1 Example G Cost of construction of nuclear power plants Description of data Table G.1 gives data, reproduced by permission of the Rand Corporation, from a report (Mooz, 1978) on 32 light water reactor

More information

GENERAL MATH PROBLEM CATEGORIES AND ILLUSTRATED SOLUTIONS MEASUREMENT STANDARDS WHICH MUST BE MEMORIZED FOR THE BROKER TEST

GENERAL MATH PROBLEM CATEGORIES AND ILLUSTRATED SOLUTIONS MEASUREMENT STANDARDS WHICH MUST BE MEMORIZED FOR THE BROKER TEST Chapter 17 Math Problem Solutions CHAPTER 17 GENERAL MATH PROBLEM CATEGORIES AND ILLUSTRATED SOLUTIONS MEASUREMENT STANDARDS WHICH MUST BE MEMORIZED FOR THE BROKER TEST Linear Measure 12 inches = 1 ft

More information

MULTIPLE REGRESSION AND ISSUES IN REGRESSION ANALYSIS

MULTIPLE REGRESSION AND ISSUES IN REGRESSION ANALYSIS MULTIPLE REGRESSION AND ISSUES IN REGRESSION ANALYSIS MSR = Mean Regression Sum of Squares MSE = Mean Squared Error RSS = Regression Sum of Squares SSE = Sum of Squared Errors/Residuals α = Level of Significance

More information

Disclaimer. Investing Observations: Things I Wish I d Known Sooner. Outline. Taxes. Andy Poggio June 10, 2016. Taxes Risk / Reward Asset Classes:

Disclaimer. Investing Observations: Things I Wish I d Known Sooner. Outline. Taxes. Andy Poggio June 10, 2016. Taxes Risk / Reward Asset Classes: Disclaimer Investing Observations: Things I Wish I d Known Sooner Andy Poggio June 10, 2016 I am not a trained investment advisor Not all of my investment decisions have worked out well This presentation

More information

2. Linear regression with multiple regressors

2. Linear regression with multiple regressors 2. Linear regression with multiple regressors Aim of this section: Introduction of the multiple regression model OLS estimation in multiple regression Measures-of-fit in multiple regression Assumptions

More information

Useful information for Loan Officers regarding Residential Appraisals

Useful information for Loan Officers regarding Residential Appraisals Useful information for Loan Officers regarding Residential Appraisals USPAP USPAP stands for Uniform Standards of Professional Appraisal Practice. USPAP establishes the standards and guidelines for real

More information

Premaster Statistics Tutorial 4 Full solutions

Premaster Statistics Tutorial 4 Full solutions Premaster Statistics Tutorial 4 Full solutions Regression analysis Q1 (based on Doane & Seward, 4/E, 12.7) a. Interpret the slope of the fitted regression = 125,000 + 150. b. What is the prediction for

More information

ENTREPRENEURIAL FINANCE: Strategy Valuation and Deal Structure

ENTREPRENEURIAL FINANCE: Strategy Valuation and Deal Structure ENTREPRENEURIAL FINANCE: Strategy Valuation and Deal Structure Chapter 9 Valuation Questions and Problems 1. You are considering purchasing shares of DeltaCad Inc. for $40/share. Your analysis of the company

More information

Understanding the Appraisal

Understanding the Appraisal Understanding the Appraisal Understanding the Appraisal Much of the private, corporate and public wealth of the world consists of real estate. The magnitude of this fundamental resource creates a need

More information

How Government Regulation Affects the Price of a New Home

How Government Regulation Affects the Price of a New Home How Government Regulation Affects the Price of a New Home Paul Emrath, Ph.D. National Association of Home Builders Economics and Housing Policy Group Over the past several years, the market for new housing

More information

NATIONAL ASSOCIATION OF REALTORS. National Center for Real Estate Research

NATIONAL ASSOCIATION OF REALTORS. National Center for Real Estate Research NATIONAL ASSOCIATION OF REALTORS National Center for Real Estate Research THE VALUE OF HOUSING CHARACTERISTICS by G. Stacy Sirmans, PhD Kenneth G. Bacheller Professor of Real Estate Department of Insurance,

More information

Information & Instructions: HUD 1 Settlement closing statement PREVIEW

Information & Instructions: HUD 1 Settlement closing statement PREVIEW Information & Instructions: HUD 1 Settlement closing statement 1. Section 5 of the Real Estate Settlement Procedures Act of 1974 (Public Law 93-533), effective on June 30, 1976 (RESPA), requires certain

More information

Sri Lanka Accounting Standard -LKAS 40. Investment Property

Sri Lanka Accounting Standard -LKAS 40. Investment Property Sri Lanka Accounting Standard -LKAS 40 Investment Property -1088- 85-1089- 4 This Standard does not apply to: biological assets related to agricultural activity (seelkas 41 Agriculture); and mineral rights

More information

Chapter 19. Georgia Law for the Real Estate Sales Contract INTRODUCTION

Chapter 19. Georgia Law for the Real Estate Sales Contract INTRODUCTION Chapter 19 Georgia Law for the Real Estate Sales Contract INTRODUCTION As discussed in the previous chapter, one of the most important requirements of a real estate sales contract is that it must be "definite

More information

Chapter 27: Taxation. 27.1: Introduction. 27.2: The Two Prices with a Tax. 27.2: The Pre-Tax Position

Chapter 27: Taxation. 27.1: Introduction. 27.2: The Two Prices with a Tax. 27.2: The Pre-Tax Position Chapter 27: Taxation 27.1: Introduction We consider the effect of taxation on some good on the market for that good. We ask the questions: who pays the tax? what effect does it have on the equilibrium

More information

Income Capitalization Analysis Re: Example Property By: Your Name of Your Company Name

Income Capitalization Analysis Re: Example Property By: Your Name of Your Company Name Income Capitalization Analysis Re: Example Property By: Your Name of Your Company Name To obtain a reliable indication of a property's Market Value from the Income Capitalization Approach, it is necessary

More information

The Effect of Housing on Portfolio Choice. July 2009

The Effect of Housing on Portfolio Choice. July 2009 The Effect of Housing on Portfolio Choice Raj Chetty Harvard Univ. Adam Szeidl UC-Berkeley July 2009 Introduction How does homeownership affect financial portfolios? Linkages between housing and financial

More information

Real estate terms and definitions

Real estate terms and definitions Real estate terms and definitions Annual Percentage Rate (APR): The total yearly cost of a mortgage as expressed by the actual rate of interest paid. The APR includes the base interest rate, points and

More information

VALUE 11.125%. $100,000 2003 (=MATURITY

VALUE 11.125%. $100,000 2003 (=MATURITY NOTES H IX. How to Read Financial Bond Pages Understanding of the previously discussed interest rate measures will permit you to make sense out of the tables found in the financial sections of newspapers

More information

Frequently Asked Tax Questions for Homeowners, Buyers, Sellers

Frequently Asked Tax Questions for Homeowners, Buyers, Sellers Frequently Asked Tax Questions for Homeowners, Buyers, Sellers August 2011 1. Homestead Exemption What is the Homestead Exemption, and how do I apply for it? Louisiana law provides an exemption from parish

More information

Broker Final Exam Review Math

Broker Final Exam Review Math Broker Final Exam Review Math Copyright Gold Coast Schools 1 Minimum Annual Production Page 73 A brokerage office had 200 sales last year. After paying sales commissions to the associates, there was $229,000

More information

The Market Value of Mature Trees in Single-Family Housing Markets.

The Market Value of Mature Trees in Single-Family Housing Markets. The Market Value of Mature Trees in Single-Family Housing Markets. By Jonathan Dombrow, Mauricio Rodriguez, and C.F. Sirmans January 1, 2000 Appraisal Journal Abstract How does the existence of mature

More information

http://www.elsevier.com/copyright

http://www.elsevier.com/copyright This article was published in an Elsevier journal. The attached copy is furnished to the author for non-commercial research and education use, including for instruction at the author s institution, sharing

More information

Franchising in Residential Brokerage

Franchising in Residential Brokerage Franchising in Residential Brokerage Authors John D. Benjamin, Peter Chinloy, G. Donald Jud and Daniel T. Winkler Abstract This paper explores the profitability of real estate franchises. The database

More information

IAPRI Quantitative Analysis Capacity Building Series. Multiple regression analysis & interpreting results

IAPRI Quantitative Analysis Capacity Building Series. Multiple regression analysis & interpreting results IAPRI Quantitative Analysis Capacity Building Series Multiple regression analysis & interpreting results How important is R-squared? R-squared Published in Agricultural Economics 0.45 Best article of the

More information

LCGI MORTGAGE FUND, LLC (A CALIFORNIA LIMITED LIABILITY COMPANY) FINANCIAL STATEMENTS DECEMBER 31, 2005

LCGI MORTGAGE FUND, LLC (A CALIFORNIA LIMITED LIABILITY COMPANY) FINANCIAL STATEMENTS DECEMBER 31, 2005 (A CALIFORNIA LIMITED LIABILITY COMPANY) FINANCIAL STATEMENTS DECEMBER 31, 2005 TABLE OF CONTENTS Page No. Independent Auditors' Report 1 Balance Sheet 2 Statement of Income and Changes in Members' Equity

More information

USES OF CONSUMER PRICE INDICES

USES OF CONSUMER PRICE INDICES USES OF CONSUMER PRICE INDICES 2 2.1 The consumer price index (CPI) is treated as a key indicator of economic performance in most countries. The purpose of this chapter is to explain why CPIs are compiled

More information

ENGINEERING ECONOMICS AND FINANCE

ENGINEERING ECONOMICS AND FINANCE CHAPTER Risk Analysis in Engineering and Economics ENGINEERING ECONOMICS AND FINANCE A. J. Clark School of Engineering Department of Civil and Environmental Engineering 6a CHAPMAN HALL/CRC Risk Analysis

More information

Shares Mutual funds Structured bonds Bonds Cash money, deposits

Shares Mutual funds Structured bonds Bonds Cash money, deposits FINANCIAL INSTRUMENTS AND RELATED RISKS This description of investment risks is intended for you. The professionals of AB bank Finasta have strived to understandably introduce you the main financial instruments

More information

COMMERCIAL INSURANCE NEWS COINSURANCE: INSURANCE TO VALUE REVISITED

COMMERCIAL INSURANCE NEWS COINSURANCE: INSURANCE TO VALUE REVISITED AN ESSENTIAL CONCEPT IN PROPERTY INSURANCE By Robert J. Prahl, CPCU The need to adequately insure property, whether it be commercial or personal, is one of the most fundamental concepts of insurance. Its

More information

SHORT INTRODUCTION OF SHORT SELLING

SHORT INTRODUCTION OF SHORT SELLING Financial Assets and Investing SHORT INTRODUCTION OF SHORT SELLING Dagmar Linnertová Faculty of Economics and Administration, Masaryk University, Lipová 41a, 602 00 Brno, e-mail: Dagmar.Linnertova@mail.muni.cz

More information

Home HOW TO BUY A WITH A LOW DOWN PAYMENT 3 % A consumer s guide to owning a home with less than three percent down. or less

Home HOW TO BUY A WITH A LOW DOWN PAYMENT 3 % A consumer s guide to owning a home with less than three percent down. or less A consumer s guide to owning a home with less than three percent down. 3 % WITH A LOW DOWN PAYMENT or less HOW TO BUY A Home If you re dreaming of buying a home, congratulations. You re in good company!

More information

Multiple Linear Regression

Multiple Linear Regression Multiple Linear Regression A regression with two or more explanatory variables is called a multiple regression. Rather than modeling the mean response as a straight line, as in simple regression, it is

More information

Multiple Linear Regression in Data Mining

Multiple Linear Regression in Data Mining Multiple Linear Regression in Data Mining Contents 2.1. A Review of Multiple Linear Regression 2.2. Illustration of the Regression Process 2.3. Subset Selection in Linear Regression 1 2 Chap. 2 Multiple

More information

Forward Contracts and Forward Rates

Forward Contracts and Forward Rates Forward Contracts and Forward Rates Outline and Readings Outline Forward Contracts Forward Prices Forward Rates Information in Forward Rates Reading Veronesi, Chapters 5 and 7 Tuckman, Chapters 2 and 16

More information

Chapter 12. Introduction to Value Determination

Chapter 12. Introduction to Value Determination Chapter 12 Value Theory, Highest and Best Use Analysis, and the Cost Approach 11/17/2005 FIN4777 - Special Topics in Real Estate - Professor Rui Yao 1 Introduction to Value Determination Price is usually

More information

International Financial Reporting Standard 7 Financial Instruments: Disclosures

International Financial Reporting Standard 7 Financial Instruments: Disclosures EC staff consolidated version as of 21 June 2012, EN EU IFRS 7 FOR INFORMATION PURPOSES ONLY International Financial Reporting Standard 7 Financial Instruments: Disclosures Objective 1 The objective of

More information

Final RESPA Rule Requirements

Final RESPA Rule Requirements Final RESPA Rule Requirements The Department of Housing and Urban Development (HUD) released its final rule on the Real Estate Settlement Procedures Act (RESPA) on November 20, 2008. The final rule and

More information

1. What is the critical value for this 95% confidence interval? CV = z.025 = invnorm(0.025) = 1.96

1. What is the critical value for this 95% confidence interval? CV = z.025 = invnorm(0.025) = 1.96 1 Final Review 2 Review 2.1 CI 1-propZint Scenario 1 A TV manufacturer claims in its warranty brochure that in the past not more than 10 percent of its TV sets needed any repair during the first two years

More information

Chapter 5 Financial Forwards and Futures

Chapter 5 Financial Forwards and Futures Chapter 5 Financial Forwards and Futures Question 5.1. Four different ways to sell a share of stock that has a price S(0) at time 0. Question 5.2. Description Get Paid at Lose Ownership of Receive Payment

More information

Good luck! BUSINESS STATISTICS FINAL EXAM INSTRUCTIONS. Name:

Good luck! BUSINESS STATISTICS FINAL EXAM INSTRUCTIONS. Name: Glo bal Leadership M BA BUSINESS STATISTICS FINAL EXAM Name: INSTRUCTIONS 1. Do not open this exam until instructed to do so. 2. Be sure to fill in your name before starting the exam. 3. You have two hours

More information

Chapter Seven. Multiple regression An introduction to multiple regression Performing a multiple regression on SPSS

Chapter Seven. Multiple regression An introduction to multiple regression Performing a multiple regression on SPSS Chapter Seven Multiple regression An introduction to multiple regression Performing a multiple regression on SPSS Section : An introduction to multiple regression WHAT IS MULTIPLE REGRESSION? Multiple

More information

Public Choices and Property Values

Public Choices and Property Values C E N T R A L I N D I A N A U N D E R S T A N D I N G T H E R E G I O N A N D I D E N T I F Y I N G C H O I C E S CENTER FOR URBAN POLICY AND THE ENVIRONMENT DECEMBER 2003 Public Choices and Property Values

More information

Interpretive Guidance for Real Estate

Interpretive Guidance for Real Estate Adoption Date: 1 February 2004 Revised Effective Date: 1 January 2006 Effective Date: 1 January 2005 Retroactive Application: No Public Comment Period: Jul Dec 2002 Interpretive Guidance for Real Estate

More information

City of Cincinnati Pamphlet Residential Lease Option Contract

City of Cincinnati Pamphlet Residential Lease Option Contract City of Cincinnati Pamphlet Residential Lease Option Contract PLEASE READ THIS BROCHURE CAREFULLY! YOU SHOULD READ THIS BROCHURE BEFORE YOU SIGN A LEASE WITH OPTION TO BUY AGREEMENT! This Pamphlet explains

More information

How to create a winning CMA

How to create a winning CMA Purpose: This 3-hour course is will teach you how to create a Comparative Market Analysis (CMA) before listing a home for sale. We will show you how to research a home using the Internet, Tax Records,

More information

The Impact of Contract Type on Broker Performance: Submarket Effects

The Impact of Contract Type on Broker Performance: Submarket Effects The Impact of Contract Type on Broker Performance: Submarket Effects Authors Ronald C. Rutherford, Thomas M. Springer and Abdullah Yavas Abstract Rutherford, Springer and Yavas (2001) develop and empirically

More information

MISSING DATA TECHNIQUES WITH SAS. IDRE Statistical Consulting Group

MISSING DATA TECHNIQUES WITH SAS. IDRE Statistical Consulting Group MISSING DATA TECHNIQUES WITH SAS IDRE Statistical Consulting Group ROAD MAP FOR TODAY To discuss: 1. Commonly used techniques for handling missing data, focusing on multiple imputation 2. Issues that could

More information

AFFORDABLE HOUSING ACTION PLAN

AFFORDABLE HOUSING ACTION PLAN AFFORDABLE HOUSING ACTION PLAN ACT LAND RENT SCHEME - FREQUENTLY ASKED QUESTIONS LAND What is the ACT Land Rent Scheme? The Land Rent Scheme is an ACT Government initiative to increase access to affordable

More information

Sensitivity Analysis 3.1 AN EXAMPLE FOR ANALYSIS

Sensitivity Analysis 3.1 AN EXAMPLE FOR ANALYSIS Sensitivity Analysis 3 We have already been introduced to sensitivity analysis in Chapter via the geometry of a simple example. We saw that the values of the decision variables and those of the slack and

More information

ECON 459 Game Theory. Lecture Notes Auctions. Luca Anderlini Spring 2015

ECON 459 Game Theory. Lecture Notes Auctions. Luca Anderlini Spring 2015 ECON 459 Game Theory Lecture Notes Auctions Luca Anderlini Spring 2015 These notes have been used before. If you can still spot any errors or have any suggestions for improvement, please let me know. 1

More information

BUYER Guide. Toledo Area Real Estate. A Tradition of Trust in Ohio Real Estate. (419) 874-1188 Jon@Modene.com www.modene.com

BUYER Guide. Toledo Area Real Estate. A Tradition of Trust in Ohio Real Estate. (419) 874-1188 Jon@Modene.com www.modene.com BUYER Guide (419) 874-1188 Jon@Modene.com www.modene.com Toledo Area Real Estate A Tradition of Trust in Ohio Real Estate Sell Your Home From childhood to parenthood to retirement, your home is a statement

More information

Density, Design and Infrastructure Costs: Physical Survey of New Jersey Development

Density, Design and Infrastructure Costs: Physical Survey of New Jersey Development Density, Design and Infrastructure Costs: Physical Survey of New Jersey Development OSP Technical Reference Document #104 June 1990 Prepared by: The New Jersey Office of State Planning 33 West State Street,

More information

THE FUNDAMENTAL THEOREM OF ARBITRAGE PRICING

THE FUNDAMENTAL THEOREM OF ARBITRAGE PRICING THE FUNDAMENTAL THEOREM OF ARBITRAGE PRICING 1. Introduction The Black-Scholes theory, which is the main subject of this course and its sequel, is based on the Efficient Market Hypothesis, that arbitrages

More information

Real Estate Investment Newsletter May 2004

Real Estate Investment Newsletter May 2004 Pooled Investment: A Primer This month I will explain the benefits of pooling your money to invest in real estate along with other investors as an alternative to direct ownership of real estate. We ll

More information

A Test Of The M&M Capital Structure Theories Richard H. Fosberg, William Paterson University, USA

A Test Of The M&M Capital Structure Theories Richard H. Fosberg, William Paterson University, USA A Test Of The M&M Capital Structure Theories Richard H. Fosberg, William Paterson University, USA ABSTRACT Modigliani and Miller (1958, 1963) predict two very specific relationships between firm value

More information

BEPS ACTIONS 8-10. Revised Guidance on Profit Splits

BEPS ACTIONS 8-10. Revised Guidance on Profit Splits BEPS ACTIONS 8-10 Revised Guidance on Profit Splits DISCUSSION DRAFT ON THE REVISED GUIDANCE ON PROFIT SPLITS 4 July 2016 Public comments are invited on this discussion draft which deals with the clarification

More information

Market Prices of Houses in Atlanta. Eric Slone, Haitian Sun, Po-Hsiang Wang. ECON 3161 Prof. Dhongde

Market Prices of Houses in Atlanta. Eric Slone, Haitian Sun, Po-Hsiang Wang. ECON 3161 Prof. Dhongde Market Prices of Houses in Atlanta Eric Slone, Haitian Sun, Po-Hsiang Wang ECON 3161 Prof. Dhongde Abstract This study reveals the relationships between residential property asking price and various explanatory

More information

Camille Kerr and Corey Rosen, National Center for Employee Ownership

Camille Kerr and Corey Rosen, National Center for Employee Ownership Camille Kerr and Corey Rosen, National Center for Employee Ownership Companies with 1,000 or fewer employees, almost all of which are closely held, provide almost 60% of all private sector jobs in the

More information

An Empirical Analysis of Insider Rates vs. Outsider Rates in Bank Lending

An Empirical Analysis of Insider Rates vs. Outsider Rates in Bank Lending An Empirical Analysis of Insider Rates vs. Outsider Rates in Bank Lending Lamont Black* Indiana University Federal Reserve Board of Governors November 2006 ABSTRACT: This paper analyzes empirically the

More information

Augmenting Housing Sales Data to Improve Hedonic Estimates of Golf Course Frontage

Augmenting Housing Sales Data to Improve Hedonic Estimates of Golf Course Frontage Augmenting Housing Sales Data to Improve Hedonic Estimates of Golf Course Frontage Abstract Hedonic price modeling quantified the impact of golf course frontage on single-family housing prices at 20 different

More information

Environmental Determinants of Housing Prices: The Impact of Flood Zone Status

Environmental Determinants of Housing Prices: The Impact of Flood Zone Status Environmental Determinants of Housing Prices: The Impact of Flood Zone Status Authors David M. Harrison, Greg T. Smersh and Arthur L. Schwartz, Jr. Abstract This article is the winner of the Real Estate

More information

A Consumer s Guide to. Buying a Co-op

A Consumer s Guide to. Buying a Co-op A Consumer s Guide to Buying a Co-op A Consumer s Guide to Buying a Co-op In the United States, more than 1.2 million families of all income levels live in homes owned and operated through cooperative

More information

MORTGAGE TERMS. Assignment of Mortgage A document used to transfer ownership of a mortgage from one party to another.

MORTGAGE TERMS. Assignment of Mortgage A document used to transfer ownership of a mortgage from one party to another. MORTGAGE TERMS Acceleration Clause This is a clause used in a mortgage that can be enforced to make the entire amount of the loan and any interest due immediately. This is usually stipulated if you default

More information

Investment Property. Indian Accounting Standard (Ind AS) 40. Investment Property

Investment Property. Indian Accounting Standard (Ind AS) 40. Investment Property Investment Property Indian Accounting Standard (Ind AS) 40 Investment Property Contents Paragraphs OBJECTIVE 1 SCOPE 2 4 DEFINITIONS 5 15 RECOGNITION 16 19 MEASUREMENT AT RECOGNITION 20-29 MEASUREMENT

More information

Indian Accounting Standard (Ind AS) 40 Investment Property

Indian Accounting Standard (Ind AS) 40 Investment Property Indian Accounting Standard (Ind AS) 40 Investment Property Contents Paragraphs OBJECTIVE 1 SCOPE 2 4 DEFINITIONS 5 15 RECOGNITION 16 19 MEASUREMENT AT RECOGNITION 20-29 MEASUREMENT AFTER RECOGNITION 30-56

More information

How to Forecast Your Revenue and Sales A Step by Step Guide to Revenue and Sales Forecasting in a Small Business

How to Forecast Your Revenue and Sales A Step by Step Guide to Revenue and Sales Forecasting in a Small Business How to Forecast Your Revenue and Sales A Step by Step Guide to Revenue and Sales Forecasting in a Small Business By BizMove Management Training Institute Other free books by BizMove that may interest you:

More information

Reverse Mortgages (HECM) Helping Seniors

Reverse Mortgages (HECM) Helping Seniors Reverse Mortgages (HECM) Helping Seniors What is a Reverse Mortgage? A reverse mortgage is a non-recourse loan that allows homeowners to access a portion of their home equity. (Traditional refinance)

More information

TITLE CLOSING AND SETTLEMENT PROCEDURES

TITLE CLOSING AND SETTLEMENT PROCEDURES 10 TITLE CLOSING AND SETTLEMENT PROCEDURES RATIONALE FOR CHAPTER This chapter discusses the most important part of the real estate transaction: the closing. Not only will title transfer, but that well-earned

More information

Conveyancing Guide. We welcome you as a client of Tyndallwoods and thank you for your instructions. Conveyancing has two basic stages

Conveyancing Guide. We welcome you as a client of Tyndallwoods and thank you for your instructions. Conveyancing has two basic stages Conveyancing Guide We welcome you as a client of Tyndallwoods and thank you for your instructions. This guide is part of the Tyndallwoods commitment to quality of service. We are well aware that moving

More information

THE FINANCIAL CRISIS: Is This a REPEAT OF THE 80 S FOR AGRICULTURE? Mike Boehlje and Chris Hurt, Department of Agricultural Economics

THE FINANCIAL CRISIS: Is This a REPEAT OF THE 80 S FOR AGRICULTURE? Mike Boehlje and Chris Hurt, Department of Agricultural Economics THE FINANCIAL CRISIS: Is This a REPEAT OF THE 80 S FOR AGRICULTURE? Mike Boehlje and Chris Hurt, Department of Agricultural Economics The current financial crisis in the capital markets combined with recession

More information

Understanding Options: Calls and Puts

Understanding Options: Calls and Puts 2 Understanding Options: Calls and Puts Important: in their simplest forms, options trades sound like, and are, very high risk investments. If reading about options makes you think they are too risky for

More information

An Economic Analysis of New Jersey s Realty Transfer Fee. Prepared for the. New Jersey Association of Realtors Government Research Foundation, Inc.

An Economic Analysis of New Jersey s Realty Transfer Fee. Prepared for the. New Jersey Association of Realtors Government Research Foundation, Inc. An Economic Analysis of New Jersey s Realty Transfer Fee Prepared for the New Jersey Association of Realtors Government Research Foundation, Inc. By the Rutgers Economic Advisory Service Center for Urban

More information

Discussion of Discounting in Oil and Gas Property Appraisal

Discussion of Discounting in Oil and Gas Property Appraisal Discussion of Discounting in Oil and Gas Property Appraisal Because investors prefer immediate cash returns over future cash returns, investors pay less for future cashflows; i.e., they "discount" them.

More information

It Is In Your Interest

It Is In Your Interest STUDENT MODULE 7.2 BORROWING MONEY PAGE 1 Standard 7: The student will identify the procedures and analyze the responsibilities of borrowing money. It Is In Your Interest Jason did not understand how it

More information

A guide to the compilation of Registers of Scotland statistics

A guide to the compilation of Registers of Scotland statistics A guide to the compilation of Registers of Scotland statistics Contents 1. Introduction and background... 1 1.1 UK House Price Index... 1 1.2 Quarterly statistical release... 2 2. Administrative procedures

More information

HUD-1. GFE vs. HUD-1: HUD-1 Introduction:

HUD-1. GFE vs. HUD-1: HUD-1 Introduction: HUD-1 GFE vs. HUD-1: The new HUD-1 Settlement Statement (the HUD-1 ) is designed to allow the borrower to compare the document with the Good Faith Estimate (the GFE ) received before closing, including

More information

Flood Hazards, Insurance, and House Prices - A Hedonic Property Price Analysis 1

Flood Hazards, Insurance, and House Prices - A Hedonic Property Price Analysis 1 Flood Hazards, Insurance, and House Prices - A Hedonic Property Price Analysis 1 Viewu Afua Dei-Tutu Department of Economics College of Arts and Sciences East Carolina University M.S. Research Paper Under

More information

ICASL - Business School Programme

ICASL - Business School Programme ICASL - Business School Programme Quantitative Techniques for Business (Module 3) Financial Mathematics TUTORIAL 2A This chapter deals with problems related to investing money or capital in a business

More information

Additional sources Compilation of sources: http://lrs.ed.uiuc.edu/tseportal/datacollectionmethodologies/jin-tselink/tselink.htm

Additional sources Compilation of sources: http://lrs.ed.uiuc.edu/tseportal/datacollectionmethodologies/jin-tselink/tselink.htm Mgt 540 Research Methods Data Analysis 1 Additional sources Compilation of sources: http://lrs.ed.uiuc.edu/tseportal/datacollectionmethodologies/jin-tselink/tselink.htm http://web.utk.edu/~dap/random/order/start.htm

More information

The Top Closing Scripts and Strategies from Mega-Producer Agents

The Top Closing Scripts and Strategies from Mega-Producer Agents The Top Closing Scripts and Strategies from Mega-Producer Agents Copyright Bernice Ross, CEO www.realestatecoach.com I. In today s session you will learn: Key Learning Points A. The best closing scripts

More information

Employee Participation Kit For Temple University

Employee Participation Kit For Temple University Employee Participation Kit For Temple University TABLE OF CONTENTS o How to access the Philadelphia Home Buy Now grant step-by-step instructions o Philadelphia Home Buy Now grant application o Privacy

More information

Hedge Effectiveness Testing

Hedge Effectiveness Testing Hedge Effectiveness Testing Using Regression Analysis Ira G. Kawaller, Ph.D. Kawaller & Company, LLC Reva B. Steinberg BDO Seidman LLP When companies use derivative instruments to hedge economic exposures,

More information

University of Essex. Term Paper Financial Instruments and Capital Markets 2010/2011. Konstantin Vasilev Financial Economics Bsc

University of Essex. Term Paper Financial Instruments and Capital Markets 2010/2011. Konstantin Vasilev Financial Economics Bsc University of Essex Term Paper Financial Instruments and Capital Markets 2010/2011 Konstantin Vasilev Financial Economics Bsc Explain the role of futures contracts and options on futures as instruments

More information

Purchasing and Financing a Home

Purchasing and Financing a Home Purchasing and Financing a Home C H A P T E R 9 degree, the Stockwells discovered that both of them could pursue their careers right where they were. For the first year, their rent was $550 per month.

More information

The Value of Foreclosed Property

The Value of Foreclosed Property The Value of Foreclosed Property Author Anthony Pennington-Cross Abstract This paper examines the expected price appreciation of distressed property and compares it to the prevailing metropolitan area

More information

PROCUREMENT GUIDE: CHP FINANCING

PROCUREMENT GUIDE: CHP FINANCING PROCUREMENT GUIDE: CHP FINANCING 1. Overview The decision of whether and how to finance a CHP system is a critical step in the development of a CHP project. CHP systems require an initial investment to

More information

1568 SF Twin Residential/Office Building. This information is deemed reliable, but not guaranteed.

1568 SF Twin Residential/Office Building. This information is deemed reliable, but not guaranteed. Large Corner Double Lot Off Street Private Parking Black Horse Pike Frontage 1050 SF Retail Building 1568 SF Twin Residential/Office Building 1472 SF Residential/Office 3BR, 2Bath This information is deemed

More information

Preparing cash budgets

Preparing cash budgets 3 Preparing cash budgets this chapter covers... In this chapter we will examine in detail how a cash budget is prepared. This is an important part of your studies, and you will need to be able to prepare

More information